Montenegro’s Prime Minister was an early investor in Terra (LUNA).

Stell' dir vor, die Alpen fallen direkt ins Mittelmeer. Montenegro. Foto von lasserbua via flickr.com. Lizenz: Creative Commons

Do Kwon of Terra (LUNA) hid in Montenegro to evade international justice. Now it comes to light that he had an investor at the top of the country – the fascinating Prime Minister Milojko Spajic.

This was a twist in the Terra story no one saw coming. Really not.

To briefly refresh your memory: Terra was a smart contract blockchain, similar to Ethereum, but closely tied to an algorithmic stablecoin, the UST, the Terra Dollar. After UST collapsed, it brought Terra down with it – triggering the big crypto crisis in late 2022 that escalated with the bankruptcy of FTX. As a result, Terra founder Do Kwon was indicted in South Korea and the US. He fled, was arrested in Montenegro, was released a few months later, and settled with the SEC a week ago.

Fitting to the place it now appears that the Montenegrin Prime Minister Milojko Spajic was an early investor in Terraform Labs, the company behind Terra. Spajic, who took office in October 2023, had already invested $75,000 in Terraform Labs in April 2018, just days before Terra’s registration in Singapore, in exchange for 750,000 LUNA tokens.

So, Spajic paid ten cents per LUNA. That was a sensationally good deal, as LUNA tokens were never that cheap before the big collapse. By mid-2019, the value was well over 50 cents, in 2021 it rose to more than $10, by October LUNA was not available for less than $40, and in spring 2022 they were even worth more than $100.

Price of LUNA. Imagine you enter on the left of the screenshot…

The crypto market is wild, but the chance to multiply your capital a thousandfold in four years is still rare. If Spajic sold at a good time, he would have pocketed around $75 million. He would definitely be the most successful speculator among all European – no, global! – heads of state.

But who is Spajic – and why did he invest in Terra so early?

Milojko Spajic: The Central Figure

Milojko Spajic has been the Prime Minister of Montenegro since October 2023. He is a relatively impressive person and one of those types of leaders who could be an enormous asset to Europe.

Spajic was born in September 1987, making him just 36 years old. He studied „Ecometrics“ in Japan, which is the quantitative analysis of economic, but also ecological and social systems, and earned a master’s degree from a business school in Paris. Besides Serbo-Croatian, he speaks English, Japanese, Chinese, Russian, and French. After his studies, he worked on Wall Street, in Paris and Tokyo, among others for Goldman Sachs and the venture capital firm Das Capital SG – in Singapore.

In 2020, at the mere age of 33, he became the Minister of Finance in Montenegro, where he implemented controversial economic reforms. After Prime Minister Zdravko Krivokapic dismissed his deputy Dritan Abazovic amid the parliamentary crisis, he appointed Spajic as his successor. However, Spajic founded the pro-European party „Europe now!“ with Minister of Economy Jakov Milatovic, becoming its chairman. In October 2023, he was finally elected Prime Minister in this role.

Spajic seeks EU and NATO membership for Montenegro, wants to strengthen relations with Serbia as well as Montenegro’s independence. He seems to be on a good path. According to the Konrad-Adenauer-Stiftung, Montenegro is the most advanced EU accession candidate, thanks in part to the reforms initiated under Spajic in recent months. „No country in the region is currently moving more decisively to create the necessary conditions,“ said German Chancellor Olaf Scholz during a meeting with Spajic at the end of April.

Looking at his age, his economic education, his great ambitions, and his interest in crypto – one might consider Spajic to be the Nayib Bukele of Europe, the politician who turns a poor, small country on the periphery of Europe into a financial and tourism hub. But while Bukele, the President of El Salvador, has invested in a solid cryptocurrency with Bitcoin, Spajic’s investment in Terra turned out to be a dud, which currently threatens to backfire on him painfully.

Spajic Concealed the Investment

Spajic came into contact with Terra through Das Capital SG. He worked there from 2017 to 2020 as a partner. According to his own statements, Spajic invested in Terra on behalf of this fund. He did not mention a personal investment in Terra, and he did not declare owning LUNA tokens in his asset and income declaration.

The documents that have now come to light in the course of the trial against Terraform Labs show that Spajic concealed a significant piece of information about his wealth from the public – and, more bureaucratically speaking, from the Anti-Corruption Agency, to which politicians in Montenegro are accountable. This must be a scandal for a politician in the highest position of a country.

Spajic now faces allegations of being involved in a conflict of interest. The question of why Do Kwon was arrested and detained in Montenegro in the first place is likely to exacerbate the scandal. The first calls for his resignation are already coming from the opposition. It would be a shame if the young, pro-European, progressive, technology-friendly government were to fall over this scandal.